Harris Corp

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HRS : NYSE : Technology
$100.18 -1.58 | -1.55%
Today's Range: 99.8865 - 101.375
Avg. Daily Volume: 717900.0
01/17/17 - 4:01 PM ET

Financial Analysis


HARRIS CORP's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. HARRIS CORP has weak liquidity. Currently, the Quick Ratio is 0.69 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 11.81% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)1754.01811.0
EBITDA ($mil)365.0368.0
EBIT ($mil)285.0285.0
Net Income ($mil)160.0148.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)284.0666.0
Total Assets ($mil)11778.012564.0
Total Debt ($mil)4486.05081.0
Equity ($mil)3053.03462.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin37.5737.22
EBITDA Margin20.820.32
Operating Margin16.2515.74
Sales Turnover0.630.46
Return on Assets2.852.84
Return on Equity11.6910.3
Debt Q1 FY17 Q1 FY16
Current Ratio1.311.63
Debt/Capital0.60.59
Interest Expense44.048.0
Interest Coverage6.485.94


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)124.09124.17
Div / share0.530.5
EPS1.271.18
Book value / share24.627.88
Institutional Own % n/a n/a
Avg Daily Volume719648.0670081.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 30.07 for the Communications Equipment industry and a significant premium compared to the S&P 500 average of 25.49. For additional comparison, its price-to-book ratio of 4.14 indicates a premium versus the S&P 500 average of 2.84 and a premium versus the industry average of 3.31. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount. After reviewing these and other key valuation criteria, HARRIS CORP proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HRS 35.97 Peers 30.07   HRS 14.05 Peers 14.55

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

HRS is trading at a premium to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HRS is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HRS 16.03 Peers 19.93   HRS 0.32 Peers 0.92

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

HRS is trading at a discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HRS trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HRS 4.14 Peers 3.31   HRS -11.29 Peers 27.99

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HRS is trading at a premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, HRS is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HRS 1.70 Peers 2.93   HRS 29.12 Peers 19.56

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HRS is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

HRS has a sales growth rate that significantly exceeds its peers.

 

 

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